By Ben Blaschke
Just a day after regaining full control of her voting power in a settlement agreement with ex-husband Steve Wynn, Elaine Wynn has called for the board of Wynn Resorts to either step aside or welcome multiple newly elected directors to restore its reputation.
The company’s largest single shareholder at 9.26%, Elaine Wynn outlined her request in a letter sent to the Wynn Resorts board and subsequently filed with the SEC on Tuesday. Specifically, she asks for the board to reopen the window in which shareholders can nominate directors and propose other business for another 60 days ahead of the 2018 annual general meeting.
“I hereby request that … The board take steps that would allow for a majority of the board to be comprised of new directors effective at the 2018 annual meeting,” she wrote.
“I see at least two possible paths to achieving this outcome. The first would be to declassify the board. The second would be for the board to vote to increase its size such that the newly elected directors would constitute a majority of the board. The board would also take such further steps as would be required to mitigate any effects of any implicated change of control provisions.”
Elaine Wynn clarified that she had no intention of nominating herself or anyone associated with her, instead pushing for an independent board completely removed from the sexual misconduct scandal that saw Steve Wynn step down as Chairman and CEO in February and the corporate governance of the board come into question.
She also called for all major transactions to be put on hold until after the new board had been installed, making reference to reports that Wynn Resorts may consider selling Wynn Boston Harbor amid regulatory scrutiny.
“The reconstituted board should be in place before any material decisions about transactions are made, or any actions are taken, that could have an adverse impact on long-term shareholder value,” Ms Wynn said. “I believe that reconstituting the board would be viewed favorably by the company’s regulators.”
It was announced on Monday that Elaine Wynn had agreed to release claims against both Wynn Resorts and its General Counsel Kim Sinatra as part of a settlement agreement with Steve Wynn related to the alleged breach by her ex-husband in 2012 of a Stockholders Agreement between the two.
Steve Wynn had gained control of Elaine Wynn’s voting rights as part of the 2012 Stockholders Agreement, but his ex-wife took the matter to court in 2015 claiming the agreement was invalid after Wynn Resorts forcibly redeemed all shares held by the third member of the Stockholders Agreement, Kazuo Okada. Elaine Wynn lost her seat on the board at the time.
On Monday Wynn Resorts had stressed that neither the company nor Sinatra had made any payment associated with this week’s settlement agreement between Elaine and Steve Wynn. On Tuesday the company revealed that Steve Wynn had agreed to pay Elaine Wynn US$25 million as part of the settlement. The settlement brings six years of in-fighting and courtroom battles between the formerly married couple to an end.
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